Pemex: Reserves overestimated

According to a new study published on Sunday by state oil monopoly Petroleos Mexicanos, the potential for oil exploration in the Gulf of Mexico has been greatly overestimated.

Petroleos Mexicanos, or Pemex, revealed that terrain in waters deeper than 3,000 meters in the Gulf of Mexico an area known as the Abyssal Plain were "not suitable for oil exploration." The statement represents a serious setback for future drilling in the area, and, according to petroleum analysts, jeopardizes any possible collaborations with foreign investors.

Guillermo Pérez Cruz, head of Pemex's Special Unit for Deep Water Oil Exploration, said the new report reduced previous oil estimates in the zone by 53 percent.

Pemex had initially earmarked a possible 54 billion barrels of oil that could be drilled from the area. With that figure now cut in half, Pérez Cruz says, exploration becomes economically unviable.

The survey's findings come at a time when the state company is desperate to find new reserves. Recently, it's top executive, Luis Ramírez Corzo, described the monopoly as "on the verge of bankruptcy" with total liabilities of US88.5 billion and an annual investment requirement of US10 billion.

"The financial structure of Pemex is in crisis," he said, noting that the company has US45 billion in debt.

More than half of that, US24 billion, is in off-balance-sheet obligations that must be paid to private contractors upon completion of projects. Pemex is forced to resort to such devices by a tax regime that claims more than 60 percent of the firm's gross revenue for the treasury.

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